Taxi firms work on app for both Japan, Korea

Sept 12,2018

Leading taxi-hailing app providers in Japan and Korea will collaborate to offer integrated services to cater to the needs of the growing number of visitors to both countries.

Japan Taxi and Kakao Mobility say they recently signed an agreement on capital partnership, and are planning to develop a single smartphone app for hailing taxis in the two countries as early as the end of this year.

Japan Taxi, Japan’s largest taxi app, has sold Kakao Mobility new shares worth 1.5 billion yen ($13.5 million), equivalent to a 3.4 percent stake. It is the Tokyo-based firm’s first capital alliance with a foreign partner.

The taxi industry’s operating income in Japan stood at nearly 1.7 trillion yen in the year leading up to March 2016, according to the Japan Federation of Hire-Taxi Associations, compared to an estimated 800 billion yen in Korea, said a Kakao Mobility spokeswoman.

The Korean company operates the Kakao T app, whose services include dispatching drivers and parking, already has 240,000 member taxi drivers, or 96 percent of the country’s total, and over 19 million users at home.

It aims to capture growing demand from Korean visitors to Japan, which in the first seven months of this year are estimated to have grown 14.5 percent from a year earlier to over 4.6 million, according to the Japan National Tourism Organization.

Those traveling from Japan to Korea for the same period of this year rose 20.2 percent from a year earlier to top 1.5 million, the second largest group of foreign visitors after Chinese, according to the government-backed Korea Tourism Organization.

Japan Taxi, an arm of Nihon Kotsu, a major taxi service provider, covers 70,000 taxis, about one-third of the total in Japan, and has had a cumulative total of 5.5 million downloads of its app, according to the company.

The partnership with the Korean counterpart is aimed at boosting the number of available taxis to 90,000 and achieving 16 million downloads by 2020, it said.

In January 2017, most taxi operators in Tokyo began offering a lower starting fare of 410 yen to attract foreign visitors and elderly people traveling short distances.

Japan’s Transport Ministry and the taxi industry hope the new base fare will help increase demand as the aging country gears up for the 2020 Tokyo Olympics and Paralympics.

“We will actively cooperate with Japan Taxi to forge innovation in the taxi-hailing culture in Japan with our technology and know-how,” the KakaoMobility spokeswoman told NNA in a phone interview.